Transcript Today’s discussion

Healthcare Reform:
What’s Ahead and What’s Your Plan?
Blair Childs, Senior Vice President, Public Affairs
March 15, 2011
The Premier performance improvement alliance
Harnessing the power of collaboration
• 2,500 hospitals, 72,000 non-acute sites
• Nation’s largest clinical/operational/supply
chain comparative databases
• $36 billion in annual spend
• Malcolm Baldrige National Quality Award
• Three time recipient of Ethisphere’s Most
Ethical Companies award
Owners
Affiliates
Cost Reduction
Quality
Improvement
• Award winning programs addressing
environmentally sustainable sourcing
Risk
Mitigation
Execution Engine
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Advocacy
Today’s discussion
• The environment :
– “D, D & D” and the healthcare imperative
• The big power shift
– Implications and priorities: 2011 – 2012
– Will healthcare reform be repealed?
• Health reform implementation
– Timeline and general direction
• Where is this headed and what should you do?
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The Environment: Worry
• ~9% unemployment
• 2010 - Federal spending 24% of GDP (highest since WWII)
– Tax revenues 15% of GDP
• 2001 Debt = 33% of GDP; 2010 Debt = 62% of GDP
• If remain on current course:
– Deficit remains high through decade and debt will increase to 90%
of GDP by 2020
– 2025 - all Federal revenues will only cover interest payments,
Medicare, Medicaid, SS
– 2035 - debt will outstrip entire economy
The big deficit driver is healthcare, even w/o reform
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Debt as a percent of GDP: Deficit Commission
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President’s National Commission on Fiscal
Responsibility and Reform
• Final recommendations received at least 11 of 18 votes
– $4 trillion in deficit reduction through 2020
– Limit federal health spending to GDP+1% after 2020
 Exceeding the targets would trigger action by the President and Congress
– Fix Medicare doc payments (SGR) and pay for it by:
 Cutting payments to doctors, other health providers, and drug companies
 Reduce excess payments to hospitals for GME
 Cut Medicare payments for bad debts
 Increasing cost-sharing in Medicare
 Passing legal reform
– Expand cost-containment demonstration and pilot projects by 2015
– Eliminate provider (hospital) carve-outs from IPAB
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Election implications
•
•
•
2012
Jobs and deficit
Healthcare focus: costs
–
–
–
•
•
•
Transparency
Pay for value (not volume); Test and scale: Innovation Center
Medical malpractice reform
Implementation, oversight & investigations
Coverage expansion?
Republicans well positioned, but could flip again
–
–
2012 Senate (23D/10R); Redistricting (195 R; 49 D;92 split;92 Comm),
economy, jobs, Tea Party
Open seats: Bingaman (NM); Lieberman (CT), Conrad (ND), Kyl (AZ),
Hutchinson (TX), Webb (VA); Akaka (HI) – (5Ds – 2Rs)
We are not going back to the way things were.
Best to proceed as though no change has occurred.
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Partisan Control of Legislatures 2011
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Presidential reelection and unemployment
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Largest State Budget Shortfalls on Record
*Reported to date
Source: Center on Budget and Policy Priorities survey, revised December 2010.
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State Deficits for FY 2011
Percentage shortfall in state and D.C. budgets for fiscal year 2011.
54
41.5
38.3
36.6
34.7
32.4
30.3
28.9
26.2
30.2
26
25.6
24.1
21.621.6
20.2
18.9
14.4
11.5
23.9
21.6
16.1
15.3
12.5
12
9.4 8.7 8.8
8.3
9.6
9.2
9.4
14.8
15.6
13.9
14.6
11.3
9.6
8.8
9.810.2
8.8
10.3
6.2
3.4
3.6
AL
AZ
CA
CO
CT
DC
DE
FL
GA
HI
IA
ID
IL
IN
KS
KY
LA
MA
ME
MD
MI
MN
MO
MS
NC
NE
NH
NJ
NM
NV
NY
OH
OK
OR*
PA
RI
SC
SD
TN
TX
UT
VT
VA
WA
WI
WV
WY
1.7
*California based on remaining 2010 shortfall and projected 2011 budget; Oregon has a two-year budget.
Source: Center on Budget and Policy Priorities | cbpp.org
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The overarching strategic umbrella
of healthcare reform
Track 1
Cuts to Existing FFS System
• Market basket reductions
• DHS cuts
• Nonpayment for anything
preventable or unnecessary
Track 2
Disrupt Existing System
• Bundled Payments
• Innovation Center
• Demonstrations
• ACOs
Future state
•
Winners and losers
•
Accountability & transparency
•
People-centered primary care
•
E-health and other innovations
•
TOMORROW
Primary & preventative care
Intensive
care
New focus on population health and social
determinants
•
Risk-based, value-driven reimbursement
(P4P)
•
Cost reductions
•
Quality across the continuum and
focus on transitions
•
Smaller hospitals with more
intensive care
Non-Acute/
Non-Acute/
specialty
specialtycare
care
Intensive
care
Primary & preventative
care
1766
•
New roles of public and private sector
(partnerships?)
TODAY
Payment reform across the payment silos
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Regulations implementing reform: 2011
Hospital
value-based
purchasing
(Proposed)
1/7/11
Jan
Program
integrity additional
provider
screening
(Final)
1/21/11
Annual
inpatient
Uniform
update
explanation of
Long-term benefits, + Readmission
Accountable
reduction Medicaid
and CLASS coverage,
care
HACs
program
Act
definitions
organizations
(Proposed ) (Proposed)
(Proposed) (Proposed)
(Final)
Feb
March
April
State
Innovation –
Accountable
Review &
care
approval
organizations
process
(Proposed)
(Proposed)
May
Hospital
value-based
purchasing
(Final)
June
Exchange
(Proposed)
July
Aug
Annual
Inpatient
update +
Readmission
reduction
program
(Final
Annual
outpatient
update
(Final)
Annual
outpatient
update
(Proposed)
Sep
Oct
Transparency
reports (PPSA)
(Procedures)
Target dates for release of proposed and final regulations in 2011
implementing provisions of the Affordable Care Act (these are fluid and
likely to move)
Nov
Dec
Proposed Inpatient Value-Based Purchasing Rule
• Rewards for achievement or improvement
• Budget neutral payment changes begin October 1, 2012 by
reducing base operating payments for each discharge by
–
–
–
–
–
1% in FY 2013,
1.25% in FY 2014,
1.5% in FY 2015,
1.75% in FY 2016, and
2% in FY 2017.
• Quality measures from Hospital Compare measure set
– 25 measures (17 process/8 HCAHPS dimensions) in FY 13, and
– Adds 20 measures (3 mortality, 8 HACs, and 9 IQI/PSIs) in FY 14
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Simulated Impact of CMS VBP Proposed Rule
Number of
Hospitals
Total Base Operating
DRG Payments 2011
1% Base Operating
DRG Payments
Net VBP Payment
($ millions)
($ millions)
($ millions)
All
3,222
86,457
865
0.0
Urban
2,305
76,514
765
+0.7
Rural
917
9,943
99
-0.7
Large Urban DSH
1763
61,741
617
-13.5
Major Teaching
Premier members:
242
17,426
174
-6.5
HQID
201
7,960
80
+6.8
Non-HQID
984
30,061
301
-19.8
QUEST members
143
6,424
3.2
+3.5
non-QUEST members
992
29,658
297
-15.9
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Announcement of IC and Patient Safety Initiative
• Announcement anticipated early April
• Expected to lay out priorities and process for Innovation
Center
• Public/private, HAC/readmissions reduction effort to help
hospitals before 6% payment tied to these measures
• Pledge by hospitals, consumers, business, to support
• Unclear on measurement system and incentive program
structure. $1.5B tied to program.
• Goal: 40% reduction in HACs by 2013 and 20% reduction
in readmissions.
• Opportunity for organizations and hospitals to work with
hospitals to improve performance.
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Collaboratives drive top performance
Systematic improvement
(Inpatient value)
Population total value
2.0
Payer Partners
► Insurers
► Employers
► States
► CMS
Process Improvement
(Evidence-Based Care)
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A representative sample of U.S. hospitals
QUEST charter members include urban/rural,
large/small and teaching/non-teaching facilities across 31 states
WA
MT
ME
ND
MN
OR
ID
VT
NH
WI
SD
MI
NY
WY
IA
NE
NV
UT
CA
AZ
PA
IL
CO
KS
OK
NM
MO
TX
OH
KY
W
V
VA
AR
AL
SC
70%
Disproportionate
share
FL
33% Safety Net
GA
LA
38% teaching
14% rural
RI
CT
NJ
DE
MD
DC
NC
TN
MS
Bed size ranges:
22% - 150 beds or less
29% - 151-300 beds
25% - 301-450 beds
24% - 451 or more beds
IN
MA
QUEST collaborative driving improvements
Year 1 – 30 month results
# Hospitals Achieving
QUEST TPT in all 3
Dimensions
% of Hosptials in the QUEST Top Performacne
Threshold (TPT)
94%
76
71%
71%
68%
59%
49%
50%
Baseline
Year 1
25%
33
Year 2
25%
6
Evidence-Based Care
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Mortality
Cost of Care
Baseline
Year 1
Year 2
Year 1
18 Months
Year 2
30 months
Lives saved
8,043
14,649
22,164
25,235
Dollars saved
$577M
$1.036B
$2.13B
$2.85B
Patients receiving EBC
24,818
41,130
43,741
63,094
ACO model: Six core components
A group of providers willing and capable of accepting accountability for the total
cost and quality of care for a defined population.
Core Components
Payor Partners
► Insurers
• People Centered
• Health Home
► CMS
► Employers
► States
• High-Value Network
• Population Health
• ACO Leadership
• Payor Partnerships
Building accountability through collaboratives
Implementation Collaborative
Readiness Collaborative
• Ready to begin implementing
• Willingness to implement in the future
• Executive sponsorship & participation
• Participation in learning Webinars
• Payer partner participation and
transparency
• Gap analysis to pinpoint focus areas
• Physician network & sufficient population
base (5,000 equivalent Medicare lives)
• Participation in meetings with ACO
Implementation Collaborative
• Transparency and acceptance of
common cost/quality metrics (QUEST,
HEDIS, others)
• Preparation to collect population-based
measures
• Population health data infrastructure
(EHR, HIE, Payer)
• Participation in work groups and
meetings
• ACO contracting vehicle (legal entity)
• Participation in learning networks
• Milestones to keep on track to join the
ACO Implementation Collaborative
Collaborative participants
Varying degrees of integration
Less integrated
Bundled
payment for
single
episode of
care
Bundled
payment for
chronic care
More integrated
Clinically
integrated
PHO
Employed
and
independent
physicians
Employed
physicians
only
Payor partners
Provider-Sponsored Plans
Geisinger
Presbyterian New Mexico
Baystate
Summa
Billings Clinic
Employers
IBM
Caterpillar
UNITE HERE Local 54 representing:
• Trump Entertainment Resorts, Inc.
• Harrah’s Entertainment
• Hilton Hotels Corp.
• MGM Mirage
Private Plans
Anthem/WellPoint
Blue Cross Plans
HealthSpring/Bravo
United
BCBS MT
Horizon BCBS
BCBS MA
Cigna
Coventry
Medica
Aetna
HMSA
New West
Government Payors
CMS
State Medicaid plans
S-CHIP plans
VA
Components and Capabilities
Health Home
A. Deliver People Centered
Primary Care
B. Optimize Chronic, Acute
and Preventative Care
C. Manage Population
Segments to Optimize Health
Status
D. Coordinate Care Across
Continuum
E. Health Home Value Care
Systems
F. Drive Continuous
Improvement in Practice
Population Outcomes
G. Develop New Care
Models to Improve Specific
Clinical Conditions Across
the Spectrum of Care
People Centered Foundation
A. Involve People in
Decisions that Affect their
Health Care
B. Provide People with Easy
Access to Health Care
C. Activate Individuals to
Take Responsibility for their
Own Health
D. Regularly Assess and
Address Individuals' and
Population's Needs
E. Measure and Improve the
Experience of People within
the ACO Population
Payor Partnership
A. Negotiate and Manage
ACO Contract with Payer
Partners
B. Design aligning incentive
systems for ACO members
that may be administered by
Payer Partner
C. Collaborate with Payer
Partners to Manage
Population Experience
High Value Network
A. Deliver High Value
Specialist Care
B. Deliver High Value
Outpatient Facility Services
C. Deliver High Value
Inpatient Services
D. Deliver High Value PostAcute Care
E. Integrate and Coordinate
Care Across the Spectrum
F. Drive Continuous
Improvement in ACO
Population Outcomes
G. Develop New Care
Models to Improve Specific
Clinical Conditions Across
the Spectrum of Care
Population Health Data
Management
A. Capture and Analyze Data
from Multiple Sources
B. Applications and Systems
that Enable Population
Health Management
C. Information Exchanges
and Communication
Pathways for ACO Patients &
Participants
ACO Leadership
A. Use Reimbursement to Align ACO
Participants with ACO Objectives
B. Provide ACO Wide Results Reports to all
Participants
C. Communicate Consistently and Routinely to
all Participants
D. Provide Strategic Management of ACO Entity
E. Manage ACO as a Combined Physician
Hospital Entity
F. Provide Centralized Medical Management
Functions
G. Report on and Facilitate Management of Total
Medical Cost
H. Manage Intra-ACO Transfer Prices / Costs
I. Manage Financial Performance of ACO
J. Oversee Triple Aim Outcomes for Entire
Population
K. Effectively Manage the Operational
Transitions Required to Create an ACO
L. Develop an Organizational Culture Consistent
with an ACO System
M. Train Physicians and Other Leaders in
Leadership Development in Order to Foster
Effective Leadership in a New ACO System
N. Enable ACO Contracting
O. Evaluate, Analyze, Establish Appropriate
Legal Structure
P. Educate and Appropriately Manage
Interactions Across and Between ACO Parties
Q. Impact and Monitor ACO Regulatory and
Legislative Environment
Where is this all headed?
Federal budget will continue to pressure healthcare cost reduction
– Keeping healthcare spending at the center of the political debate
Reform in some form is here to stay
– But, there will be 10 years of fixes and adjustments
Reforms will reduce hospital volume & make winners and losers
– Readmission and HAC penalties, efficiency measures, bundled payment,
ACOs, demos
2013 - watershed year; 2011 unclear
ACOs and IC will remain priority and grow in importance
1. ACOs will roll out on at least two tracks
2. Rule design will be critical
State issues and focus provides an opportunity and could be future
Planning imperatives
• Maximize efficiency and through-put
• Align with physicians
• Evidence based decision-making
– Where you stand on elements of reform
– Comparative effectiveness research
– Quality and outcomes measures
•
•
•
•
Embrace transparency
Look to national comparisons
Increased federal regulatory burden
Continual changes
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